Funding Critical

Indian Railways (IR) is considered as the lifeline of the Indian economy. IR facilitates not only movement of passengers from one place to another but also ensure that materials/goods are delivered be it for the industries or the households. Most of the sectors of the economy, be it mining, construction, retail, industrial, engineering, agriculture are heavily depended on the Railways to deliver in time and at an economical cost. The pace of developing railway infrastructure is not matching with the ever increasing demand. The acceleration of the dedicated freight corridor and high speed passenger corridor can only lead to creating sufficient supply side stock. The investment requirement is too high for the Government to sustain, the need of the hour is to bring in private sector investment in almost all facets of the railways infrastructure development.

REGISTERING GROWTH

During April-October 2012, Indian Railways (IR) have carried 565.37 million tonnes of revenue earning freight traffic compared to 536.92 million tonnes carried last year during the same period. The freight carried registered an increase of 5.30 per cent over the corresponding period of the previous year. In revenue terms the total approximate earnings of IR on originating basis during April to October 2012 were Rs 68671.58 crore compared to Rs 57359.88 crore during the same period last year, registering an increase of 19.72 per cent. The total goods earnings have gone up from Rs 38090.19 crore during April – October 2012 to Rs 47386.64 crore during corresponding period of previous year, registering an increase of 24.41 per cent.

During the month of October 2012, the revenue earning freight traffic carried by Indian Railways was 83.92 million tonnes. There is an increase of 6.24 million tonnes over the actual freight traffic of 77.68 million tonnes carried by the Indian Railways during the same period last year, showing an increase of 8.03 per cent.

PASSENGER STATS

The total approximate numbers of passengers booked during April – October 2012 were 5002.49 million compared to 4817.02 million in the corresponding period of the previous year, showing an increase of 3.85 per cent. In the suburban and non-suburban sectors, the numbers of passengers booked during April-October 2012 were 2600.52 million and 2401.97 million compared to 2518 million and 2056.95 million during the same period last year, showing an increase of 3.84 per cent and 4.52 per cent respectively. The total passenger revenue earnings during April – October 2012 were Rs 18017.12 crore compared to Rs 16305.84 crore during the same period last year, registering an increase of 10.49 per cent.

PRIORITY AREAS

The constitution of Rail Tariff authority is one of the priorities followed closely by issuing Mumbai elevated rail corridor, accelerating work on the seven high speed corridors and last but not the least is to monitor Dedicated Freight Corridor.

COMMERCIAL DEVELOPMENT

Rail Land Development Authority (RLDA) was formed in 2007 to undertake commercial development of vacant railway land. Indian Railway network occupies a land area measuring about 10.65 lakh acres. Out of this, vacant land accounts for about 1.13 lakh acre. It is proposed to utilize vacant land for commercial development where feasible.

CHALLENGES

The challenges before fast tracking railway projects are in terms of project funding, ironing out land acquisition and faster environmental clearance.

PRIVATE SECTOR PARTICIPATION

A high-level panel on infrastructure financing has projected an estimated investment of Rs 51.46 lakh crore in the 12th Plan. Out of this the private sector contribution would be to the tune of 47% and public-private partnership (PPP) is likely to be the preferred mode of achieving this. According to CAG report tabled in May 2012, the railways is facing a severe fund crunch and accumulated funds had eroded by 93%. Sam Pitroda led panel looking for modernisation of railways in the next five years has opined that railways suffers from a severe and chronic under-investment in railway infrastructure. At least Rs.5.6 trillion would be required to modernize the railways in the next five years. Such as large investment can be achieved if PPP mode is followed in building the rail infrastructure. It is estimated that around Rs 80,000 crore of private sector investment will be required for implementation of various railway projects under Public Private Partnership (PPP) mode. The scope for these investment include high-speed corridors development between Mumbai-Ahmedabad, elevated rail corridor between Churchgate and Virar in Mumbai,, modernisation of stations, logistics parks, private freight terminals, port connectivity, dedicated freight corridor, loco, coach and wagon manufacturing units, energy conservation, etc. A revised outlay of Rs 5.48 lakh
crore has been proposed for the 12th Five Year Plan by the Ministry of Railways to Planning Commission for meeting the requirements of expansion, modernization and safety.

HIGH SPEED RAIL CORRIDOR

The Government of Kerala has proposed to build a high-speed railway link in the state, extending till Mangalore in Karnataka. The project is technically feasible and the railway ministry fully supports the project. Funding is an issue. The pre-feasibility report prepared by Delhi Metro Rail Corp. Ltd has recommended that the project should be extended up to Mangalore . The construction will be taken up by Indian Railways, where as the operations and maintenance can be awarded to private partner.

COAL EVACUATION

Coal is critical for the power sector based on which the industries and sectors are dependent. The coal production in the country has registered record increase in the last two quarters. Coal off-take has also recorded significant growth during this period while coal supply to Power Sector during April to Oct 2012 has increased by 12 percent. The Government of India has identified 54 coal blocks with total Geographical reserves of about 18.22 Billion Tonnes. The bidding of these coal blocks are in the pipeline. Leading coal producer, CIL has posted 9% growth and envisages quantum growth in coal production during 12th plan period from the upcoming coalfields of North Karanpura
(Central Coalfields), Mand-Raigad coalfields (South Eastern Coalfields Ltd) and IB Valley Coalfields (Mahanadi Coalfields). The criticality here is the evacuatio of nearly 290 million tonnes (MT) of coal from the above mentioned production sites to place of consumption. This largely depends upon timely construction of railway projects for coal evacuation.

As part of building rail infrastructure for coal evacuation, the following projects are envisaged: Tori-Shivpur-Hazaribag line in North Karanpura coalfield in Jharkhand; Bhupdeopur-Korichhapar/Baroud rail line in Mand Raigarh coalfield in Chhattisgarh and Jharsuguda-Barpali rail line in Orissa. During the meeting it was decided that thrust would be laid for completion of Tori-Shivpur section at the earli The tendering process for these lines will be in place shortly. The construction period will be 18 months implying completion of the line by June 2014.

SWR FOCUS ON IMPROVEMENT

South Western Railway (SWR) has targeted 41.5 km of new Railway lines, 27 km of gauge conversion and 44 km of doublings in the current financial year. is targeted for completion. The preliminary engineering-cum-traffic survey for laying of the new BG line from Mysore to Kushalnagar (84.5 km) has been completed and survey report is submitted to the Railway board.

FREIGHT CAR AXLE PROJECT IN WB

RINL plans to start preparatory work for its proposed Rs 278-crore railway freight car axle project in West Bengal. The processes were initiated for a feasibility study, initiating tendering process for the plant and machinery and the off-take agreement with the Railways.

CPP TO SAVE ENERGY COST

Indian Railways is setting up 1000 MW coal based captive power plant at Nabinagar in Bihar in JV with NTPC. Two more projects are in pipeline viz: 1320 MW capacity coal based power plant at Adra in Purulia district of West Bengal and another 700 MW gas power plant at ThakurIi near Kalyan in Maharashtra. These initiatives will result in lots of savings on energy bill.

FOREIGN COLLABORATION

To tap and benefit from each others latest technological advancement, India and China has recently signed an MoU valid for five years to enhance mutual cooperation across various areas of rail technology including High Speed Rail, Heavy Haulage and Station Development. The two sides will, inter-alia, undertake exchange of information on policies, training and exchange programmes, site visits, joint symposiums etc. Similar MOU was signed couple of months back between the Indian Railways and RENFE-Operadora and ADIF (Spanish Railways Infrastructure Manager) of Spain on technical cooperation in the field of Railway sector.

E-PROCUREMENT PICKS UP

To reduce procurement cost and provide a more transparent purchase mechanism, IR has initiated e-tendering system, which seems to be quite a success. Till date 525 tenders have been floated and IR aims to generate business of around Rs 1 lakh cr.

SAFETY ISSUES

The Government is providing adequate security to begin preparatory work for exploring 14 MT iron ore deposit at Rowghat located in Naxalite area. The rail infrastructure will be created linking SAIL’s Bhilai Steel Plant with Rowghat mines.

FUTURE OUTLOOK

The augmentation of rail infrastructure promises windfall of b2b opportunities in the days and months to come.